When does a Brain Balance franchisee begin contributing to the Advertising Fund if the Center is not yet opened?

According to Brain Balance's 2025 Franchise Disclosure Document, a franchisee is required to contribute to the Advertising Fund. This contribution is typically 2% of Gross Revenue, with a minimum of $200 due monthly, payable at the same time as the Royalty fee. However, if a Brain Balance center has not opened by the tenth month following the date of the Franchise Agreement, the franchisee is obligated to begin contributing to the Advertising Fund starting that month.

This means that even if a Brain Balance franchisee's center is not yet operational, they must still start paying into the Advertising Fund after ten months from the franchise agreement date. This obligation exists regardless of whether the center is generating revenue. The funds collected are used at the discretion of Brain Balance for national and regional advertising, public relations, research, website development, and other promotional activities.

This requirement ensures that all franchisees contribute to the overall marketing efforts of the Brain Balance system, even during the pre-opening phase. However, it also means that franchisees need to factor in this expense when planning their initial investment and cash flow projections. It is important to note that the FDD states that there is no guarantee that a franchisee will directly benefit from the advertising fund expenditures in their specific territory.

Prospective Brain Balance franchisees should carefully consider this mandatory advertising contribution, especially if they anticipate delays in opening their center. Understanding the timing and amount of this obligation is crucial for accurate financial planning and ensuring compliance with the franchise agreement.